This previous yr appears to have been a turning level for the worldwide economic system and world commerce, says a brand new report from Savills.
2022 was very possible the height for U.S. ports, too, based on the Savills 2023 Ports Report. Though exercise fell late within the yr, container quantity on the 9 busiest U.S. ports hit a document 49.9 million TEUs for the yr, or 16.8 % above 2019.
The report highlights three “megatrends” and three key forecasts for U.S. ports.
The three megatrends are:
- As shippers attempt to keep away from delays and labor disputes, West Coast ports proceed to lose market share
- Port congestion total has eased since final yr however has worsened at East Coast ports
- Though port-region logistics markets are cooling off, vacancies stay low and subsequently a problem for occupiers
Equally, there are three key issues to search for this yr.
- As the worldwide economic system slows, container volumes will lower in 2023
- This decrease demand will most likely ease port congestion and loosen labor markets
- Warehouse occupiers are more likely to regain some leverage as vacancies rise and rents stabilize
Among the many report’s observations, one of many ironies is that whereas West Coast ports have been dropping market share—partly due to congestion—to East Coast ports, the latter have seen rising congestion regardless of their speedy enlargement.
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Total, East Coast and Gulf Coast ports now have a mixed market share of 51.8 %, up from 44.5 % in 2016.
Nearer examination
In addition to in-depth appears to be like at 9 main U.S. ports (Charleston, S.C., Houston, Lengthy Seashore, Calif., Los Angeles, New York/New Jersey, Seattle/Tacoma, Wash., Oakland, Calif., Savannah, Ga., and Virginia), Savills affords particulars on the capital enchancment initiatives at these ports. The spectacular greenback figures exhibit the degrees of dedication that port authorities must hold their amenities aggressive.
Take the Port of Savannah, which has seen its annual TEU quantity rise 28.1 % since 2019, to five.9 million in 2022, which made the port the fourth-busiest within the U.S.
That progress wasn’t low cost. Savills tallies $1.3 billion in current and ongoing capital investments, together with deepening the outer harbor for 18.5 miles out into the Atlantic and a mission that may double the port’s rail elevate capability.
However there was an enormous payoff. The report notes that over the previous 5 years, Savannah’s industrial footprint has practically doubled, with 19.4 million sq. ft having been delivered in simply the final two years.
“Emptiness in port-adjacent submarkets in Savannah is close to zero, pushing future improvement and tenants to outer submarkets alongside I-95 and I-16,” the report notes.